By: Imron Mawardi

The low national zakat collection is now a concern for the government. President Joko Widodo will encourage zakat collection by issuing a Presidential Decree (Perpres) to reduce zakat for civil servants (ASN), the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri). It is also possible that state-owned enterprise employees will also be exempt. Of course, this applies only to Muslims who meet the requirements for paying zakat (muzakki).

The requirement for zakat payers is an income equivalent to 85 grams of gold per year. With the price of gold at Rp 1 million per gram, zakat is deducted from civil servants earning more than Rp 85 million per year or more than Rp 7 million per month. The zakat deduction is 2.5%.

The good news was conveyed by Baznas Chairman Noor Achmad, who had received confirmation from the president at the end of February. The issuance of this Presidential Regulation will mark a significant milestone for zakat, an Islamic financial institution crucial for wealth distribution and achieving public welfare.

Many are concerned about the Presidential Decree on zakat deductions for civil servants, the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri). The Presidential Decree is seen as state interference in religious affairs. Furthermore, in the past five years, numerous regional regulations related to religion have been revoked by the Minister of Home Affairs. Furthermore, many are concerned about the potential for corruption of zakat funds when government institutions participate in zakat management. Furthermore, zakat management is ineffective due to perceived unprofessionalism of government institutions.

Government interference in religious practices is natural. Based on the principles of Pancasila, the state should participate in upholding religion for its adherents. The reduction of zakat for civil servants, the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri) is no different from the application of Islamic law to marriage and inheritance. Similarly, the existence of religious courts not only handles marriage, divorce, and inheritance but also Islamic banking disputes.

Likewise, there's no need to worry about potential corruption and ineffective zakat distribution. This can be avoided because the government doesn't directly manage zakat funds, although they are collected through government agencies. According to the Zakat Law, the National Zakat Agency (Baznas) is responsible for managing zakat. Baznas is assisted by the Zakat Collection Institution (LAZ) in collecting, distributing, and empowering zakat.

Therefore, government agencies that deduct zakat from civil servants, the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri) are not authorized to manage zakat. These agencies can only establish Zakat Collection Units (UPZ) authorized by Baznas. These UPZs receive zakat and then hand it over to Baznas or LAZ.

However, UPZ can apply to participate in zakat distribution by developing a program that must be approved by Baznas. This program should reach stakeholders at the institutions where zakat is collected. This ensures that zakat benefits those who are close to those institutions.

In addition to these methods, on a more macro level, zakat can be synergized with the state budget. History shows that zakat is a crucial instrument for development under Islamic governments. Although the use of zakat is specific, specifically for eight groups, as stated in At-Taubah verse 60, many government programs can utilize zakat funds. These include programs for community empowerment, poverty alleviation, education, health, and the construction of places of worship.

This allows for integration of zakat funds with the state budget (APBN) to finance development. This synergy between the government and zakat institutions will benefit both parties. For Baznas and LAZ, this program synergy will make zakat distribution more effective. Zakat institutions will share with the government in empowerment and poverty alleviation efforts. This way, they can focus on specific objects or areas. Likewise, the government can focus empowerment and poverty alleviation funds on areas not covered by zakat institutions.

This can be achieved if the government truly positions zakat as part of its governance by increasing literacy, encouraging Muslims to pay zakat, and providing incentives for zakat payers. Maximizing the vast potential of zakat will significantly assist the government in financing development, particularly those related to poverty alleviation, education, and health, in accordance with the provisions of zakat recipients.

As a consequence of the zakat deduction for civil servants, the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri), the government should make zakat a direct tax deduction (tax deductible). To date, the government has only made zakat a deductible tax deduction. Zakat as a direct tax deduction does not necessarily reduce tax revenue. Reflecting on Malaysia, when zakat became a direct tax deduction, both zakat and tax revenues increased sharply.

What is the potential zakat from civil servants (PNS), the Indonesian National Armed Forces (TNI), and the Indonesian National Police (Polri)? It's clearly quite substantial. And what's important is the multiplier. According to data from the Central Statistics Agency (BPS), as of December 2020, there were 4,168,000 civil servants. Those eligible for zakat deductions are those whose income has reached the nisab (minimum threshold), which is equivalent to 85 grams of gold per year. With a gold price of Rp 1 million per gram, the nisab is equivalent to Rp 85 million, or Rp 7,000,000 per month.

Assume those with that income are civil servants in groups IV and III. Group IV accounts for 986,000, and group III 2,430,000. The total is 3,416,000. If zakat is 2.5 percent of Rp 7 million, the amount is Rp 175,000 per month, or Rp 2.1 million per year. With that calculation, the zakat of civil servants in groups III and IV reached Rp 7.17 trillion. This amount represents 70 percent of the 2020 zakat collection from Baznas and LAZ, which reached over Rp 10 trillion.

The actual potential for zakat is much greater than that. Beik's (2012) study showed that Indonesia's zakat potential reached 3.4 percent of GDP, reaching Rp 217 trillion in 2012. With a 2018 GDP of Rp 14,837 trillion (BPS, 2019), Indonesia's annual zakat potential reached Rp 504 trillion. This represents 25.96% of the government's 2018 revenue of Rp 1,942.3 trillion.

In fact, the ZIS paid by Muslims in 2018 was certainly far from that figure. This is because various studies, such as those by Saidi (2003) and Pirac (2007), indicate that only 6% of Indonesian muzakki (recipients of zakat) paid zakat to BAZ/LAZ. As many as 94% paid through non-official zakat institutions. As many as 66% paid through amil (collective donors) near their homes, such as mosques, Islamic boarding schools, or orphanages, and 28% paid directly to zakat recipients (mustahiq), especially the poor. Based on these assumptions, annual ZIS likely reached 16.67 times the LAZ/BAS revenue, or IDR 167 trillion in 2020. And Allah knows best.

This article was first published in Harian DI's way on March 31, 2021, with the title "Zakat Potential from ASN and TNI-Polri" Published here with the Author's permission for educational and da'wah purposes.